Detroit Needs Money. Can A 'Grand Bargain' Save The City's Art?
Can wealthy art lovers help save Detroit's pension funds — and one of its museums?
The city is struggling to find ways to emerge from bankruptcy. One idea: Sell the city's art to save the pensions of city retirees. The Detroit Institute of Arts, or DIA, has faced serious financial difficulties over the years, and yet it holds the city's most valuable assets: a world-class art collection that includes works by Van Gogh, Rembrandt and Matisse. Estimates vary, but Christie's recently appraised these works at more than $850 million.
Because some of those masterpieces were bought with city funds, they could be auctioned off to pay creditors. "It's the only source of money that exists in the city of Detroit," philanthropist Paul Schaap says flatly.
Pensions Vs. Paintings
Emotions run high around these two issues — the city's prized artwork, and the pensions of its retired city employees, like firefighters and librarians.
"I think it's immoral to play off art and culture against a person's basic income," says Michael Mulholland, vice president of the American Federation of State, County and Municipal Employees, Local 207, which represents about 950 city employees.
AFSCME and other labor groups are appealing the ruling that Detroit is even eligible for bankruptcy.
As for this "grand bargain," Mulholland is suspicious. "Pensions will still be cut," he says. "And then the art will belong to foundations who are controlled by corporations."
Mulholland says that Detroit's emergency manager, Kevyn Orr, has inflated the pensions' budget gap. Originally, official reports put the pension shortfall at $650 million. Kevyn Orr's audit puts it at seven times that amount. The fundraising goal for this grand bargain is $500 million.
Insufficient, Or Overly Ambitious?
Alan Pyke, deputy economic policy editor for Think Progress, thinks that just won't be enough for Orr, saying, "$500 million is pretty close to amount of money that you would need to close the official pension fund gap, but it's nowhere close to what Orr says is needed to close pension fund — so it stands to reason that Orr would continue to push for pension cuts.
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